Perkins Company owns 85% of Sheraton Company. Perkins Company sells merchandise to Sheraton Company at...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Perkins Company owns 85% of Sheraton Company. Perkins Company sells merchandise to Sheraton Company at 20% above cost (gross profit). During 2011 and 2012, such sales amounted to $400,000 and $500,000, respectively. At the end of each year, Sheraton Company had sold 50% of inventory purchased from Perkins to third parties. Calculate the amount of intercompany sales that need to be eliminated in 2011 and 2012?
a. $400,000 for 2011 and $500,000 for 2012
b. $80,000 for 2011 and $100,000 for 2012
c. $0 for 2011 and $100,000 for 2012
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
